Breach of rustic leases and their legal consequences, special reference to the CAP

One of the most common ways to develop agricultural and livestock activity is through the lease of rustic farms, which is specifically developed in the Law 49/2003, of November 26 , Rustic Leases (LAR).

The leasing of rustic properties can generate an infinite number of conflicts between the parties, even resulting in the termination of the contract for non-compliance when one of the parties does not see their claims satisfied.</p >

The termination of the contract is regulated in articles 24 et seq. of the LAR, with the following causes:

• Lack of payment.
• Do not exploit the farm, or dedicate it to different uses.
• Sublets.
• Damage to the farm or fruits.
• Expiration of the term established in the contract or in the law.
• Mutual agreement.
• Death of one of the parties.
• Breach of the obligation to pay maintenance and improvement costs.
• At the request of the landlord, either due to non-payment, reclassification of the land or damage to the property, among others.

Obligation of works and improvements

Another possible breach consists of the obligation to carry out works and improvements that are the responsibility of the lessee in the normal development of his activity. However, according to article 20 of the LAR, you cannot make walls, fences, hedges or any type of enclosure disappear without the consent of the landlord.

After the appearance of any contractual breach, the parties may request the termination of the contract, with the consequences that we see below.

Assumptions of commission of crimes in the development of agricultural activity

It is interesting to cite the cases of commission of crimes in the development of agricultural activity. For example, when slurry is spilled maliciously near public domain waters; or due to the degradation of the soil due to the accumulation of solid waste, debris or others. In these cases, the responsibility may be attributable to the lessee, for not having acted with the due diligence of a good businessman, in addition to not having obtained the authorization for its discharge, or for not having carried out the works that the land needed to avoid the environmental damage.

The appearance of these circumstances causes the parties to choose to demand compliance or termination of the contract. In this sense, the Supreme Court, in its Judgment of March 12, 2013, mentions article 1124 of the Civil Code, which indicates that:

“The power to resolve the obligations is understood to be implicit in the reciprocal ones, in the event that one of the obligors does not comply with what is incumbent upon him. The injured party may choose between demanding compliance or termination of the obligation, with compensation for damages and payment of interest in both cases”.

There are numerous resolutions issued by our courts for breaches of contractual leases.

Non-payment of rent

Another of the most common cases of termination of the contract is the non-payment of the corresponding rent. In the event of non-payment of rents, the landlord may file an eviction court proceeding accumulating the claim for the outstanding amounts and their interest. By way of illustration, the Judgment of the Provincial Court of Asturias of November 18, 2008, agrees to the termination of the contract in the event of breach of accountability in a sharecropping contract.

Changed in crop types without consent

Another very important case in rustic leases is the one resolved by the Provincial Court of Murcia, in the Judgment of June 1, 2012. In this Judgment the Chamber resolves the contract for non-compliance when the tenant has changed the types of crops without the express and written consent of the property.

Provision of the land to the landlord

The most relevant consequence of the termination of the contract is the provision of the land to the landlord. This issue is not trivial in the field of rustic leases when it has been decided to process a subsidy conditioned to the land, such as the PAC.

If the contract is terminated, either for the reasons set forth above, or for reaching the stipulated term, and the corresponding aid has been requested for a period greater than the date In which the contract is terminated, the lessee must return the basic payment rights to the lessor if he is an active farmer, or its equivalent in money.

The lessor can choose to continue developing the exploitation if it meets the required requirements, or he can assign them to the new lessee. It is highly advisable that this matter be regulated in your contract, as well as the amount to be returned, either as a whole or depending on the types of aid requested.

Any questions you have, contact us, we will offer you the advice you need in this type of situation.